Sources close to the negotiations told Media Week that a Discovery tie-up with Sky for the factual channel slot on Picnic is a "done deal".
Last week, Sky announced that Disney Channel would take the kids' channel slot on Picnic, for a service scheduled to air between 6am and 6pm daily.
As well as the pay-TV Freeview service, Picnic will also incorporate broadband and fixed-line telephony services. Customers will require a new set-top box to access the TV service, which will eventually use Mpeg-4 high-compression technology.
The use of this new technology is subject to Ofcom's approval, but Sky is believed to be in talks with Freeview box manufacturers. No pricing structure has yet been announced for the service.
Ofcom approval for its Picnic plans is vital for Sky, as it looks to end the monopoly enjoyed by Setanta in recent months on the provision of premium sports content on Freeview.
Sky has 70 people working on its project.
Meanwhile, Top Up TV, which also provides pay-TV services via Freeview, has launched new VoD services and linear channels.